There is No Retail Apocalypse
by Jordan Barkin
News of the death of retail has been greatly exaggerated. Yes, many national chains are closing locations. But the facts tell the story not of a ‘retail apocalypse’ but rather of retail evolution.
Yes, Amazon is gargantuan. But Amazon orders are often fulfilled by independently owned retailers, many of which employ significant numbers in their regions.
Yes, many malls and strip centers have empty storefronts. But, according to the National Retail Federation (NRF), “for each company closing stores, 5.2 are opening stores. For every segment of retail, there are more companies opening stores than closing stores.”
The NRF website goes on to state that, “According to Census Bureau data, 2018 saw a net increase in retail stores in the United States. There were almost 3,100 more stores during the fourth quarter of 2018 than the same quarter a year earlier. What’s interesting is that the increase appeared to be driven by smaller stores.”
Many of these smaller stores are boutiques in urban locations or college towns — locales that appeal to millennials, who have disposable income and live in cities with high employment and wage growth. Medium and large chains are now copying some of the marketing tactics of these boutiques, with campaigns focused on diversity, creativity, and causes. Chains are also being more nimble with their buying, rationalizing SKU counts in order to avoid surplus.
Those merchants who evolve to meet changing consumer demand are likely to survive.
For example, the Pennsylvania shop Bicycle Recycle recently doubled its size and added community partnerships. According to the Williamsport Sun-Gazette, the family-owned business keeps inventory costs low by using recycled parts in the bikes it sells. Owners Louisa and David Stone donate some of their merchandise to local schools and offer free vocational training.
Mom-and-pop shops are not rare. According to the U.S. Chamber of Commerce, “America’s 28 million small businesses (represent) more than 99% of all employers, accounting for nearly half of all private-sector workers, and generating 61% of net new jobs.”
For example, a family-owned retail seed company in Indiana named Beck’s ranks as the sixth-largest seed provider in the United States. The brand’s website pairs a folksy family photo with information about the advanced hybrid seeds that ensure their future.
In retail as in science, evolution means adaptation. An article in Harvard Business Review by Harrison and O’Neill said this of the retail landscape: “While painful, the turmoil has given retailers a head start in discovering how to transform constant disruption into new ways to unleash inventions that make their operations stronger.” Most merchants would agree because, though retail has never been an easy industry, many stores thrive.
During the Great Depression, a fine family-owned jewelry store in Manhattan had a drastic decrease in sales. There was no guarantee that the brand would survive. The retailer was Tiffany & Co.
About the author: Jordan Barkin is a freelance writer published by Gannett, US News & World Report, Hearst, and HuffPost. He is a former associate editor of Hearst Magazines.